Think global, weave local

Think global, weave local

Inspite of blessed with a complete supply chain - from raw material to fibre to yarn to fabric - India has not been able to cash in on the opportunity created with China vacating some segments in the global textile market.

Inspite of blessed with a complete supply
chain – from raw material to fibre to yarn to
fabric – India has not been able to cash in on
the opportunity created with China vacating
some segments in the global textile market. Small Asian countries like Bangladesh,
Vietnam, etc have fared better than India in
capturing the international market and
attracting investments from global majors.

While Bangladesh was able to increase its
garment exports from $ 26 billion to more
than $ 33 billion in the last five years, India’s
exports have remained stagnant at around $
40 billion (with finished garments
accounting for just $ 16 billion – down from $
18 billion four years ago).

Along with ease of doing business, scale of manufacturing and supporting
ecosystem will play a huge role in attracting investment in India’s textile
industry. The announcement of establishment of seven textile parks by the
government in Budget 2021 is a right move in this direction. These parks will
bring together all the key players in the value chain of the textile industry
helping in better integration and creation of a favourable ecosystem for the
industry’s growth. By bringing nylon chain on par with polyester and otherman-made fibres and reducing BCD rates on caprolactam, nylon chips and nylon
fibre& yarn to 5 per cent will aid the textile industry.

Budget 2021 has given a clear indication that the government aims to give a
big push for local manufacturing with special focus on Vocal for Local. While
the intent is to make India aatmanirbhar, the focus should be on producing
quality products worthy enough to compete globally. Think global make local
should be the mantra. This was the precise message of the recently concluded
The Indian Textile Journal’s Business E-Conference where experts deliberated on
the industry’s future roadmap. In case you have missed the ITJ’s Business E-Conference, please click here to see the webinar

The textile industry, like other industries, underwent numerous challenges
in 2020 due to Covid 19 pandemic, impacting demand and supply. Therefore,
2021-22 will be a year of revival for the textile industry as consumption resumes
and demand comes back. Most of the mills are back in operations with exports
of yarn and garment picking up, which is a positive sign for the country’s textile
industry.

Textile machinery utilisation, presently at 60-65 per cent, has shown
consistent growth in the last 6 months with demands for spares improving
meaningfully. The government’s initiatives like Production Linked Incentive(PLI) scheme, MSME classification, reduction in custom duty for inputs of
man-mad fibre, etc are likely to further propel the market.

Textile companies are expected to take advantage PLI policy once contours of
the scheme are out, as many of them expect to run at full capacity very shortly
and would require to undertake expansion.Even the order book of textile
machinery makers is building up. However, experts believe that the last quarter
of 2020-21 will give a clear picture of capital expansion plans of the industry.

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